Cambodia -- Regulatory Status Regulatory Overview

Cambodia maintains a highly restrictive and cautious stance on cryptocurrencies and virtual assets, effectively amounting to an effective ban on most public trading and issuance, particularly for licensed financial institutions. The regulatory environment is characterized by warnings and prohibitions rather than a comprehensive regulatory framework for virtual assets.

Regulatory Approach

• Restrictive/Effective Ban: Cambodia's approach is not a comprehensive regulatory framework for virtual assets. Instead, it is a restrictive one, bordering on an effective ban for most practical purposes, especially concerning local issuance, trading platforms, and financial institutions' involvement.
• Focus on Warnings and Prohibition: The primary regulatory actions have been joint warnings and directives prohibiting licensed entities from engaging in crypto-related activities, citing high risks to financial stability, consumer protection, and potential for illicit activities.
• No Legal Tender Status: Cryptocurrencies are explicitly not recognized as legal tender.

Primary Regulatory Bodies

The key regulatory bodies involved in Cambodia's stance on virtual assets are:

1. National Bank of Cambodia (NBC):

   • Role: Oversees banking and financial institutions, manages monetary policy, and ensures financial stability. The NBC has been central to issuing warnings and directives regarding virtual assets due to concerns over financial stability, consumer protection, and anti-money laundering (AML).
   • URL: National Bank of Cambodia

2. Securities and Exchange Regulator of Cambodia (SERC) (formerly Securities and Exchange Commission of Cambodia - SECC):

   • Role: Regulates Cambodia's securities market. While not directly regulating virtual assets as securities, the SERC has participated in joint warnings, especially concerning the unauthorized issuance and trading of assets that might resemble securities.
   • URL: Securities and Exchange Regulator of Cambodia

3. General-Commissariat of National Police (GCNP):

   • Role: Involved in enforcement and prevention of criminal activities, including those potentially associated with unregulated virtual asset schemes.

Key Legislation Names and Dates

Cambodia does not have specific standalone legislation for regulating virtual assets. Instead, its stance is primarily driven by:

1. Joint Announcement/Directive (July 11, 2018):

   • Issued by: National Bank of Cambodia (NBC), Securities and Exchange Regulator of Cambodia (SERC), and General-Commissariat of National Police.
   • Key Content: This landmark announcement explicitly warned the public against "the issuance, circulation, and trading of cryptocurrencies/digital currencies," stating that these activities are not permitted without obtaining a license from relevant authorities. Crucially, no such licenses have been issued or are contemplated for general crypto trading or issuance. The announcement highlighted the high risks, lack of consumer protection, and potential for money laundering and terrorism financing. It effectively banned licensed financial institutions from engaging in crypto-related services.
   • Reference: While a direct link to the original joint press release on official websites can be difficult to locate years later, this directive was widely reported by reputable news outlets and is the cornerstone of Cambodia's current regulatory posture.
     • Examples of news reports referencing the directive:
       • Phnom Penh Post Article (July 11, 2018)
       • Reuters Article (July 12, 2018)

2. General Laws (Applicable Indirectly):

   • Law on Banking and Financial Institutions: Provides the NBC with powers to regulate financial activities.
   • Law on Foreign Exchange: Grants the NBC authority over foreign currency transactions.
   • Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) laws: These general laws would apply to any financial activity and could be used against illicit crypto activities, even if crypto is not explicitly defined in them.

Current Stance on Crypto Trading and Exchanges

• Crypto Trading (Public):
  • Discouraged and High Risk: While the direct ownership of cryptocurrencies by individuals is not explicitly illegal, engaging in their issuance, circulation, or trading without an official license is prohibited. Since no such licenses are granted for general crypto activities, this effectively makes organized trading illegal.
  • Lack of Consumer Protection: The authorities repeatedly warn that there is no legal recourse or protection for investors in case of losses or fraud.
• Crypto Exchanges:
  • Not Permitted/Illegal: Operating a cryptocurrency exchange in Cambodia without a license is illegal. As no licenses are being issued for virtual asset exchanges, setting up or operating such a platform within Cambodia is effectively prohibited.
  • Financial Institutions Prohibition: Licensed banks and financial institutions are explicitly prohibited from accepting cryptocurrencies, facilitating their exchange, or engaging in any related transactions.

In summary, Cambodia's approach is one of strict caution and prohibition, aiming to shield its financial system and public from the perceived risks of virtual assets by banning most related activities for regulated entities and strongly discouraging them for the general public, rather than seeking to regulate and integrate them.